Australian Housing and Urban Research Institute …...Australian Housing and Urban Research Institute Limited Directors' report 30 June 2012 Directors' report Your directors present

Australian Housing and UrbanResearch Institute Limited ACN 090 448 918

Annual reportfor the year ended 30 June 2012

Australian Housing and Urban Research Institute LimitedACN 090 448 918

Annual report - 30 June 2012

Contents

PageDirectors' report 1Financial report 7Independent auditor's report to the members 24

Australian Housing and Urban Research Institute LimitedDirectors' report

30 June 2012

Directors' report

Your directors present their report on the Company for the year ended 30 June 2012.

DirectorsThe following persons were directors of Australian Housing and Urban Research Institute Limited during the whole of thefinancial year and up to the date of this report:

Mr Rodney FehringDr Ian WinterMs Serena WilsonMr Michael KerryMs Meredith Sussex AM

The following persons were appointed directors during the year ended 30 June 2012:

Mr Douglas Craig - appointed 7 November 2011 Dr Jeffrey Harmer - appointed 11 December 2011Professor Edwina Cornish - appointed 11 December 2011Professor Wayne McKenna - appointed 11 December 2011 Mr Grahame Searle - appointed 11 December 2011 Ms Tania Loosley-Smith (alternate director to Mr Grahame Searle) - appointed 14 December 2011Professor Robert Norris (alternate director to Professor Edwina Cornish) - appointed 24 January 2012 Mr Sean Innis (alternate director to Ms Serena Wilson) - appointed 22 March 2012 Mr Arthur Rogers (alternate director to Mr Douglas Craig) - appointed 24 May 2012

The following directors resigned during the year ended 30 June 2012:

Ms Margaret Crawford - resignation 14 October 2011Mr John Mortimore - resignation 10 December 2011Professor Deborah Terry - resignation 10 December 2011Mr Philip Fagan-Schmidt - resignation 10 December 2011Professor Graeme Wright - resignation 10 December 2011Professor Mark Western (alternate director to Professor Deborah Terry) - resignation 10 December 2011Mr Andrew Tongue (alternate director to Ms Serena Wilson) - resignation 12 September 2011Ms Liza Carroll (alternate director to Ms Serena Wilson) - resignation 22 March 2012

The resignations of directors and the appointment of replacement directors arose as a result of the requirement under theCompany’s Constitution for the rotation of certain appointments and directors resigning from their government anduniversity positions and therefore being ineligible for board membership.

Principal activities and strategic objectivesThe Australian Housing and Urban Research Institute Limited (AHURI Limited) is a not-for-profit independent networkorganisation that funds, conducts, and disseminates high quality policy-relevant research on housing, homelessness andcities. AHURI Limited works with a collaborative network of universities, researchers, and the policy and practicecommunities nation-wide and internationally.

AHURI Limited is a unique venture and its mission is to deliver high quality, policy-relevant evidence for better housing andurban outcomes. The work of AHURI Limited informs the policies and practices of governments, industry and thecommunity sector, and stimulates debate in the broader Australian community.

Funding is received from three sources: government grants from the Australian Government and all state and territorygovernments; contributions from the Institute’s university partners; and third parties.

The Company’s key activities are research management, research capacity building, publishing, research synthesis, eventmanagement, and evidence-informed facilitation. These activities are conducted in relation to the housing, homelessness,and cities research streams including a particular focus on Indigenous issues.

The Company’s strategic goals are detailed in the AHURI Limited Strategic Plan 2009-2018 and are the primary focus ofthe AHURI Board. Key activities to support the achievement of the strategic goals are:

ongoing delivery of the National Housing Research Program;

further development of the National Homelessness Research Network;

further development of the National Cities Research Program;

implementation of the Indigenous Housing and Homelessness Policy, Practice and Research Network;

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30 June 2012(continued)

further development of the Research Synthesis Service;

increased Communications activities primarily focussed on conferences and events; and

providing evidenced-informed facilitation services.

The AHURI Limited Business Plan ensures the Company’s capacity to monitor progress against the strategic goals in theStrategic Plan and to ensure the Business Plan is aligned with the associated Budget. A key feature of the Business Planis the inclusion of a number of indicators (both quantitative data and qualitative assessment) to measure progress for eachstrategic goal.

Key performance indicators established in the AHURI Limited Business Plan include:

delivery of the National Housing Research Program with a ‘whole-of-housing-system’ focus and direct relevance to

the National Affordable Housing Agreement (NAHA) reform priorities and related national housing reforms;

a National Housing Research Program Research Agenda that anticipates policy debates for the NAHA and related

Indigenous and homelessness reform priorities;

further business development of the National Homelessness Research Network;

further business development of the National Cities Research Program;

successful implementation of the Indigenous Housing and Homelessness Action Plan and associated Indigenous

Housing and Homelessness Policy, Practice and Research Network;

ensuring high levels of collaboration in the conduct of research activities;

ongoing capacity of the Company’s research networks to deliver high quality research;

ongoing capacity of the Company’s research networks to deliver policy-relevant research;

ongoing success of the Research Synthesis Service in meeting the policy needs of clients;

successful management of the events program primarily through the National Housing Research Program with

additional events to support other research networks;

establishing strategically valuable international partnerships across the Company’s research networks; and

sustaining and building the Company’s management and governance performance.

Review of operationsA summary of revenues and expenses is set out below:

2012 2011$ $

Total revenue 4,567,705 4,768,531Total expenses (5,779,545) (4,736,881)

Net (deficit)/surplus for the year ended 30 June (1,211,840) 31,650

The net deficit at the end of the 2012 financial year is $1,211,840, compared to the 2011 surplus figure of $31,650. Thesurplus/deficit varies year to year due to the timing of the commissioning of research activities. The Multi-Year ResearchProject ($721,226) was contracted in 2011-12. Also, the timing of payments under the Funding Agreement for the NationalHousing Research Program effective 1 July 2009 resulted in five payments being received in 2010, four payments in 2011and three payments in 2012. The lower number of payments recognised in 2012 was offset by increased revenue fromuniversities and higher third party income.

Significant changes in the state of affairsThere were no significant changes in the state of affairs of the Company during the financial year.

Matters subsequent to the end of the financial yearNo matter or circumstance has arisen since 30 June 2012 that has significantly affected, or may significantly affect:

(a) the Company's operations in future financial years, or(b) the results of those operations in future financial years, or(c) the Company's state of affairs in future financial years.

Likely developments and expected results of operationsThe Company intends to continue the scope of its expanded research activities and to secure additional funding from othergovernment sources and the private sector.

The Company currently receives government funding under a Funding Agreement in relation to the National HousingResearch Program. This funding was extended to 30 June 2014.

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Environmental regulationThe Company does not engage in significant undertakings which are likely to be the subject of environmental regulation.

Information on directorsDirectors Special responsibilities

Mr Rodney Fehring Executive General Manager –Residential of Australand Ltd.

Chairman and member of the Audit,Finance and Risk ManagementCommittee

Dr Jeffrey Harmer AO Company Director Director and Chairman of the Audit,Finance and Risk ManagementCommittee

Ms Meredith Sussex AM Company Director Director and member of the Audit,Finance and Risk ManagementCommittee

Dr Ian Winter Appointed Executive Director ofAHURI Limited November 2003.

Executive Director

Mr Michael Kerry Managing Director, Planning, Designand Development – Australia NewZealand, AECOM

Director

Ms Serena Wilson Deputy SecretaryDepartment of Families, Housing,Community Services and IndigenousAffairs

Director

Mr Douglas Craig Director of Housing and ExecutiveDirector, Housing and CommunityBuilding (Victoria)

Director

Professor Edwina Cornish Senior Deputy Vice-Chancellor andDeputy Vice-Chancellor (Research)Monash University

Director

Professor Wayne McKenna Deputy Vice-Chancellor, Academicand Research, University of WesternSydney

Director

Mr Grahame Searle Director General, Housing W.A. Director

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Meetings of directorsThe numbers of meetings of the Company’s board of directors and of each board committee held during the year ended30 June 2012, and the numbers of meetings attended by each director were:

Full meetingsof directors

Meetings ofAudit, Finance

and RiskManagementCommittee

A B A B

Mr Rodney Fehring 4 4 4 4Dr Jeffrey Harmer AO 2 2 2 2Ms Meredith Sussex AM 4 4 4 3Dr Ian Winter 4 4 * *Mr Michael Kerry 4 2 * *Ms Serena Wilson 4 0 * *Mr John Mortimore 2 2 2 2Professor Deborah Terry 2 1 * *Mr Philip Fagan-Schmidt 2 2 * *Ms Margaret Crawford 1 0 * *Mr Douglas Craig 3 1 * *Professor Edwina Cornish 2 0 * *Professor Wayne McKenna 2 1 * *Mr Grahame Searle 2 2 * *Professor Graeme Wright 2 2 * *Mr Andrew Tongue (alternate director to Ms Serena Wilson) 0 0 * *Ms Liza Carroll (alternate director to Ms Serena Wilson) 1 0 * *Mr Sean Innis (alternate director to Ms Serena Wilson) 2 2 * *Professor Mark Western (alternate director to Professor Deborah Terry) 2 1 * *Professor Robert Norris (alternate director to Professor Edwina Cornish) 2 2 * *Ms Tania Loosley-Smith (alternate director to Mr Grahame Searle) 2 0 * *Mr Arthur Rogers (alternate director to Mr Douglas Craig) 1 0 * *

A = Number of meetings held during the time the director held office or was a member of the committee during the yearB = Number of meetings attended* = Not a member of the relevant committee

Insurance of officersDuring the financial year, Australian Housing and Urban Research Institute Limited paid a premium of $1,469 (2011:$1,369) for the insurance of the liabilities of directors and officers of the Company.

The liabilities insured are legal costs that may be incurred in defending civil or criminal proceedings that may be broughtagainst the officers in their capacity as officers of the Company, and any other payments arising from liabilities incurred bythe officers in connection with such proceedings. This does not include such liabilities that arise from conduct involving awilful breach of duty by the officers or the improper use by the officers of their position or of information to gain advantagefor themselves or someone else or to cause detriment to the Company. It is not possible to apportion the premiumbetween amounts relating to the insurance against legal costs and those relating to other liabilities.

Proceedings on behalf of the CompanyNo person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings onbehalf of the company, or to intervene in any proceedings to which the Company is a party, for the purpose of takingresponsibility on behalf of the Company for all or part of those proceedings.

No proceedings have been brought or intervened in on behalf of the Company with leave of the Court under section 237 ofthe Corporations Act 2001.

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Auditor's Independence declaration

Australian Housing and Urban Research Institute limited Directors' report

~0 June 2012 (continued)

A copy of the auditor's independence declaration as required under section 307C of the Corporations Act 2001 is set out on page 6.

Auditor PwC continues in office in accordance with section 327 of the Corporations Act 2001.

This report is made in accordance with a resolution of directors.

24tfl-t' Mr Rodney Fehring Chairman

Melbourne Date: J. t OCJ~ UIL

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pwc

Auditor's Independence Declaration

Australian Housing and Urban Research Institute Limited Directors' report

30 June 2012 (continued)

As lead auditor for the audit of Australian Housing and Urban Research Institute Limited for the year ended 30 June 2012, I declare that, to the best of my knowledge and belief, there have been:

(a) no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and

(b) no contraventions of any applicable code of professional conduct in relation to the audit.

This declaration is in respect of Australian Housing and Urban Research Institute Limited during the period.

Darren Jenns Partner PricewaterhouseCoopers

PricewoterhouseCoopers, ABN 52 780 433 757

Melbourne Date: 2.1f. 0 um..bu 2..o f 2._

Freshwater Place, 2 Sauthbank Boulevard, SOUTH BANK VIC 3006, GPO Box 1331, MELBOURNE VIC 3001 OX 77 Melbourne, Australia Telephone +61 3 8603 1000,Facsimile +61 3 8603 1999, www.pwc.com.au

Uabili1y limi1ed by a scheme approved under Professional $1andards Legislation

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Australian Housing and Urban Research Institute Limited ACN 090 448 918

Annual report - 30 June 2012

Contents

Financial statements Statement of comprehensive income Statement of financial position Statement of changes in equity Statement of cash flows Notes to the financial statements

Directors' declaration Independent auditor's report to the members

Page

8 9

10 11 12 23 24

These financial statements cover Australian Housing and Urban Research Institute Limited as an individual entity. The financial statements are presented in the Australian currency.

Australian Housing and Urban Research Institute Limited is a Company limited by guarantee, incorporated and domiciled in Australia. Its registered office and principal place of business is:

Australian Housing and Urban Research Institute Limited Level 1, 114 Flinders Street Melbourne VIC 3000

A description of the nature of the Company's operations and its principal activities is included in the directors' report on page 1, which is not part of these financial statements.

The financial statements were authorised for issue by the directors on 2..'t Oc.e~ 2012. The Company has the power to amend and reissue the financial statements.

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Australian Housing and Urban Research Institute LimitedStatement of comprehensive income

For the year ended 30 June 2012

2012 2011Notes $ $

Revenue from continuing operations 2 4,567,705 4,768,531

National Housing Research Program research centre expenses (2,699,934) (2,236,188)Research management expenses 3 (1,121,098) (786,342)Capacity building expenses (399,485) (323,101)Research Synthesis Service expenses (380,966) (415,713)Employee costs (612,069) (573,308)Administration (161,697) (137,294)Board fees and expenses (98,517) (98,053)Occupancy (153,138) (148,537)Other expenses (152,641) (18,345)Total expenses (5,779,545) (4,736,881)

(Deficit)/surplus before income tax (1,211,840) 31,650

Income tax expense - -(Deficit)/surplus for the year (1,211,840) 31,650

Other comprehensive surplus for the year, net of tax - -

Total comprehensive (deficit)/surplus for the year (1,211,840) 31,650

(Deficit)/surplus is attributable to:Members of Australian Housing and Urban Research Institute Limited (1,211,840) 31,650

Total comprehensive (deficit)/surplus for the year is attributable to:Members of Australian Housing and Urban Research Institute Limited (1,211,840) 31,650

The above statement of comprehensive income should be read in conjunction with the accompanying notes.

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Australian Housing and Urban Research Institute LimitedStatement of financial position

As at 30 June 2012

2012 2011Notes $ $

ASSETSCurrent assetsCash and cash equivalents 4 8,139,166 6,809,135Accounts receivable and other assets 5 1,354,000 1,019,610Total current assets 9,493,166 7,828,745

Non-current assetsPlant and equipment 6 64,991 22,155Total non-current assets 64,991 22,155

Total assets 9,558,157 7,850,900

LIABILITIESCurrent liabilitiesAccounts payable and other accruals 7 468,211 432,920Contracted research funding 8 2,861,062 2,680,389Provisions 9 165,716 133,625Deferred income 10 2,562,432 148,816Total current liabilities 6,057,421 3,395,750

Non-current liabilitiesContracted research funding 11 672,438 415,012Total non-current liabilities 672,438 415,012

Total liabilities 6,729,859 3,810,762

Net assets 2,828,298 4,040,138

EQUITYReserves 12(a) 1,038,923 969,209Retained surplus 12(b) 1,789,375 3,070,929

Total equity 2,828,298 4,040,138

The above statement of financial position should be read in conjunction with the accompanying notes.

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Australian Housing and Urban Research Institute LimitedStatement of changes in equity


ReservesRetainedsurplus

Totalequity

Notes $ $ $

Balance at 1 July 2010 1,007,512 3,000,976 4,008,488

Surplus for the year - 31,650 31,650Other comprehensive surplus - - -Total comprehensive surplus for the year - 31,650 31,650

Transfers between reserves 12 (38,303) 38,303 -(38,303) 38,303 -

Balance at 30 June 2011 969,209 3,070,929 4,040,138

Balance at 1 July 2011 969,209 3,070,929 4,040,138

(Deficit) for the year - (1,211,840) (1,211,840)Other comprehensive surplus - - -Total comprehensive (deficit) for the year - (1,211,840) (1,211,840)

Transfers between reserves 12 69,714 (69,714) -69,714 (69,714) -

Balance at 30 June 2012 1,038,923 1,789,375 2,828,298

The above statement of changes in equity should be read in conjunction with the accompanying notes.

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Australian Housing and Urban Research Institute LimitedStatement of cash flows


2012 2011Notes $ $

Cash flows from operating activitiesReceipts from customers (inclusive of goods and services tax) 3,842,877 4,661,840Payments to suppliers and employees (inclusive of goods and services tax) (2,845,155) (4,943,466)

997,722 (281,626)Interest received 387,930 407,383Net cash inflow from operating activities 17 1,385,652 125,757

Cash flows from investing activitiesPayments for plant and equipment 6 (55,621) (8,301)Net cash (outflow) from investing activities (55,621) (8,301)

Cash flows from financing activitiesNet cash inflow (outflow) from financing activities - -

Net increase in cash and cash equivalents 1,330,031 117,456Cash and cash equivalents at the beginning of the financial year 6,809,135 6,691,679Cash and cash equivalents at end of year 4 8,139,166 6,809,135

The above statement of cash flows should be read in conjunction with the accompanying notes.

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Australian Housing and Urban Research Institute LimitedNotes to the financial statements

30 June 2012

Notes to the financial statements

Page1 Summary of significant accounting policies 132 Revenue 163 Expenses 164 Current assets - Cash and cash equivalents 175 Current assets - Accounts receivable and other assets 176 Non-current assets - Plant and equipment 187 Current liabilities - Accounts payable and other accruals 188 Current liabilities - Contracted research funding 189 Current liabilities - Provisions 1910 Current liabilities - Deferred income 1911 Non-current liabilities - Contracted research funding 1912 Reserves and retained surplus 1913 Remuneration of auditor 2014 Commitments 2115 Related party transactions 2116 Economic dependency 2117 Reconciliation of (deficit)/surplus after income tax to net cash inflow from operating activities 22

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30 June 2012

1 Summary of significant accounting policies

The principal accounting policies adopted in the preparation of the financial statements are set out below. These policieshave been consistently applied to all the years presented, unless otherwise stated.

Company Limited by Guarantee

Australian Housing and Urban Research Institute Limited is a Company limited by guarantee, having no share capital. TheCompany was incorporated on 5 November 1999.

Each Member of the Company undertakes to contribute to the Company's property if the Company is wound up while he,she or it is a Member or within one year after he, she or it ceases to be a Member, for payment of the Company's debtsand liabilities contracted before he, she or it ceased to be a Member and of the costs, charges and expenses of winding upand for an adjustment of the rights of contributors among themselves such amount as may be required not exceeding onehundred dollars ($100.00).

(a) Basis of preparation

These general purpose financial statements have been prepared in accordance with Australian Accounting Standards -Reduced Disclosure Requirements, other authoritative pronouncements of the Australian Accounting Standards Board,Urgent Issues Group Interpretations and the Corporations Act 2001.

The Company is a not-for-profit organisation based in Melbourne and manages the financing and conduct of researchacross universities and research facilities around Australia. Revenue is received from the Australian, State and TerritoryGovernments to support a core research program. Additional funds are received from participating research institutionsand from other sources for contracted research.

The terms and conditions governing the provision of funds by the Australian, State and Territory Governments areembodied in a Funding Agreement between them and the Company. The Funding Agreement signed on 30 June 2009was extended on 28 June 2012 and provides for funding through to 30 June 2014.

(i) Compliance with Australian Accounting Standards - Reduced Disclosure RequirementsThe financial statements of Australian Housing and Urban Research Institute Limited comply with Australian AccountingStandards - Reduced Disclosure Requirements as issued by the Australian Accounting Standards Board (AASB).

(ii) Early adoption of standardsThe Company has not elected to apply any pronouncements before their operative date in the annual reporting periodbeginning 1 July 2011.

(iii) Historical cost conventionThese financial statements have been prepared under the historical cost convention, unless otherwise stated.

(iv) Critical accounting estimatesThe preparation of financial statements may require the use of certain critical accounting estimates. It also requires theCompany to exercise its judgement in the process of applying the Company’s accounting policies. There are no areasinvolving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to thefinancial statements.

(b) Revenue recognition

Revenue is measured at the fair value of the consideration received or receivable. Amounts disclosed as revenue are netof returns and amounts collected on behalf of third parties. Revenue is recognised for the major business activities asfollows:

(i) Government fundingRevenue is recognised when the Company has the right to receive the funding from the Australian, State and TerritoryGovernments in accordance with the Funding agreement.

(ii) Research Centre fundingRevenue is recognised when receivable from the Universities.

(iii) Research Synthesis Service revenueRevenue is recognised in association with the completion and provision of the contracted report to the contracted thirdparty.

(iv) EventsRevenue and costs are recognised in the statement of comprehensive income when the event is held.

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1 Summary of significant accounting policies (continued)

(b) Revenue recognition (continued)

(v) Other revenueInterest income is recognised using the effective interest method.

Other revenue is recognised on a percentage of completion basis, which is measured via costs incurred for thetransactions as a percentage of total planned costs.

(c) Income tax

No provision for income tax is made in these accounts on the basis that the Company has received a formal letter from theAustralian Taxation Office confirming that the Company is exempt from income tax under section 50-40 Item 8.2(c) of the Income Tax Assessment Act 1997.

(d) Leases

Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified asoperating leases (note 14). Payments made under operating leases (net of any incentives received from the lessor) arecharged to the statement of comprehensive income on a straight-line basis over the period of the lease.

(e) Cash and cash equivalents

Cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short-term, highlyliquid investments with original maturities of six months or less that are readily convertible to known amounts of cash andwhich are subject to an insignificant risk of changes in value, and bank overdrafts.

(f) Accounts receivable

Accounts receivable are recognised initially at fair value and subsequently measured at fair value less provision fordoubtful debts. Accounts receivable are due for settlement no more than 30 days from the date of recognition.

Collectability of accounts receivable is reviewed on an ongoing basis. Amounts which are known to be uncollectable arewritten off. A provision for doubtful receivables is established when there is objective evidence that the Company may notbe able to collect all amounts due according to the original terms of receivables. The amount of the provision is thedifference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at theeffective interest rate. The amount of the provision is recognised in the statement of comprehensive income.

(g) Plant and equipment

All plant and equipment is stated at historical cost less depreciation. Historical cost includes expenditure that is directlyattributable to the acquisition of the items.

Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, onlywhen it is probable that future economic benefits associated with the item will flow to the Company and the cost of the itemcan be measured reliably. All other costs including repairs and maintenance are charged to the statement ofcomprehensive income during the financial period in which they are incurred.

Depreciation of assets is calculated using the straight line method to allocate their cost, net of their residual values, overtheir estimated useful lives, at the following rates:

- Plant and equipment 13% - 33.33%- Leasehold improvements 20%

The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of the reporting period.

An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greaterthan its estimated recoverable amount.

Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These are included inthe statement of comprehensive income.

The cost of improvements to or on leasehold properties is amortised over the unexpired period of the lease or theestimated useful life of the improvement to the Company, whichever is the shorter.

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1 Summary of significant accounting policies (continued)

(h) Accounts payable

These amounts represent liabilities for goods and services provided to the Company prior to the end of financial yearwhich are unpaid. The amounts are unsecured and are usually paid within 30 days of recognition.

(i) Contracted research funding

An accrual is recognised for the full research contracted amount in respect of research funding commitments, when apresent obligation exists. A present obligation exists when the company enters into a research project contract with theresearch centres.

(j) Borrowing costs

Borrowing costs are expensed as incurred.

(k) Employee benefits

(i) Wages and salaries, and annual leaveLiabilities for wages and salaries, including non-monetary benefits and annual leave, expected to be settled within 12months of the end of each reporting period are recognised in other payables and provision for employee benefits inrespect of employees' services up to the end of each reporting period and are measured at the amounts expected to bepaid when the liabilities are settled.

(ii) Long service leaveThe liability for long service leave is recognised in the provision for employee benefits and measured as the present valueof expected future payments to be made in respect of services provided by employees up to the end of each reportingperiod. Consideration is given to expected future wage and salary levels, experience of employee departures and periodsof service. Expected future payments are discounted using market yields at the end of each reporting period on nationalgovernment bonds with terms to maturity and currency that match, as closely as possible, the estimated future cashoutflows.

(iii) Retirement benefit obligationsAll employees of the Company are entitled to benefits on retirement, disability or death, from the SuperannuationGuarantee Contribution (SGC) Superannuation Fund. The Company has a defined contribution section within its plan. The defined contribution section receives fixed contributions from the Company and the Company’s legal or constructiveobligation is limited to these contributions.

Contributions to the defined contribution fund are recognised as an expense as they become payable. Prepaidcontributions are recognised as an asset to the extent that a cash refund or a reduction in the future payments is available.

(l) Goods and Services Tax (GST)

Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is notrecoverable from the taxation authority. In this case it is recognised as part of the cost of acquisition of the asset or as partof the expense.

Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GSTrecoverable from, or payable to, the taxation authority is included with other receivables or payables in the statement offinancial position.

Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financingactivities which are recoverable from, or payable to the taxation authority, are presented as operating cash flows.

(m) New accounting standards and interpretations

Certain new accounting standards and UIG interpretations have been published that are not mandatory for 30 June 2012reporting periods. The Company’s assessment indicates that there are no new Australian Accounting Standards orinterpretations that have been issued but are not yet effective with an expected material impact on the Company's financialstatements in the period of initial application.

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2 Revenue

2012 2011$ $

From continuing operations

RevenueNational Housing Research Program government funding 2,340,900 3,075,300National Housing Research Program research centre funding 917,783 702,782Third party income 482,178 96,129Research Synthesis Service income 286,839 418,926Interest income 387,930 407,383National Cities Research Program income 144,465 35,824National Homelessness Research Network income - 2,938

4,560,095 4,739,282

Other revenuePublications sales revenue 19 19Freight, postage & handling revenue 14 -Other 7,577 29,230

7,610 29,249

4,567,705 4,768,531

The timing of payments under the Funding Agreement for the National Housing Research Program effective 1 July 2009resulted in five payments being received in 2010, four payments in 2011 and three payments in 2012. The lower number ofpayments recognised in 2012 was offset by increased revenue from universities and higher third party income.

3 Expenses

2012 2011$ $

(Deficit)/surplus before income tax includes the following specific expenses:

DepreciationPlant and equipment 12,785 21,951

Total depreciation 12,785 21,951

Rental expense relating to operating leases 100,653 110,514

Research management expensesResearch administration 465,331 437,161Research dissemination 636,520 336,806Research panel meetings 14,834 6,804Research centre directors' expenses 4,413 5,571

1,121,098 786,342

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4 Current assets - Cash and cash equivalents

2012 2011$ $

Cash at bank and on hand 122,286 124,914Deposits at call 8,016,880 6,684,221

8,139,166 6,809,135

(a) Cash at bank and on hand

The cash at bank and on hand was bearing floating interest rates of 3.50% pa (2011: 4.75% pa).

(b) Deposits at call

The deposits were bearing fixed interest rates of 5.69% pa (2011: 6.15% pa). These deposits had an average maturity of6 months or less.

Deposits at call have increased due to changes in the timing of payments from the Australian Government and thecontracting of funds for the Indigenous Housing and Homelessness Policy, Practice and Research Network.

(c) Bank guarantee

The Company has a bank guarantee of $52,848 (2011: $52,848) as deposit for the office lease.

5 Current assets - Accounts receivable and other assets

2012 2011$ $

Accounts receivable (a) 1,161,868 824,970Prepayments and accrued income 192,132 194,640

1,354,000 1,019,610

(a) Impaired trade receivables

As at 30 June 2012, no accounts receivable balances were deemed to be impaired (2011 - $nil). No allowance was raisedduring the year ended 30 June 2012.

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6 Non-current assets - Plant and equipment

Plant andequipment

Leaseholdimprovements Total

$ $ $

At 1 July 2010Cost 109,835 80,496 190,331Accumulated depreciation (74,030) (80,496) (154,526)Net book amount 35,805 - 35,805

Year ended 30 June 2011Opening net book amount 35,805 - 35,805Additions 8,301 - 8,301Depreciation charge (21,951) - (21,951)Closing net book amount 22,155 - 22,155

At 30 June 2011Cost 118,135 80,496 198,631Accumulated depreciation (95,980) (80,496) (176,476)Net book amount 22,155 - 22,155

Year ended 30 June 2012Opening net book amount 22,155 - 22,155Additions 55,621 - 55,621Depreciation charge (12,785) - (12,785)Closing net book amount 64,991 - 64,991

At 30 June 2012Cost 173,757 80,496 254,253Accumulated depreciation (108,766) (80,496) (189,262)Net book amount 64,991 - 64,991

7 Current liabilities - Accounts payable and other accruals

2012 2011$ $

Accounts payable 218,899 218,609Other payables and accruals 249,312 214,311

468,211 432,920

8 Current liabilities - Contracted research funding

2012 2011$ $

Contracted research funding 2,861,062 2,680,389

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9 Current liabilities - Provisions

2012 2011$ $

Employee benefits 165,716 133,625

10 Current liabilities - Deferred income

2012 2011$ $

Deferred income 2,562,432 148,816

The deferred income balance includes amounts invoiced by the Company in respect of 2013 projects, income for events tobe held in future years and income in advance for work not yet completed on third party projects. In addition the balanceincludes the payments made in advance of performance of the related research and associated operations by theAustralian Government of $1,591,812.

11 Non-current liabilities - Contracted research funding

2012 2011$ $

Contracted research funding 672,438 415,012

Research which has been contracted but for which expenditure is not anticipated to take place within the next 12 monthsvaries according to contract dates.

12 Reserves and retained surplus

2012 2011$ $

(a) Reserves

Economic dependency reserve (i) 660,000 660,000Research synthesis reserve (ii) 199,159 195,946Other programs reserve (ii) 179,764 113,263

1,038,923 969,209

Movements:

Balance 1 July 969,209 1,007,512Transferred from/(to) retained surplus 69,714 (38,303)Balance 30 June 1,038,923 969,209

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12 Reserves and retained surplus (continued)

(b) Retained surplus

Movements in retained surplus were as follows:

2012 2011$ $

Balance 1 July 3,070,929 3,000,976(Deficit)/surplus for the year (1,211,840) 31,650Transfer (to)/from reserves (69,714) 38,303Balance 30 June 1,789,375 3,070,929

(c) Nature and purpose of reserves

(i) Economic dependency reserveIn the event that the Company were to discontinue operations the directors have estimated that it would take up to sixmonths to close the office and deregister the Company. Therefore, it is appropriate that the Company maintains 'liquidfunds' of approximately six months worth of non-research expenditure to adequately meet wind down and closure costs. Such costs relate to managing projects, staff, insurance, office rental (and related costs such as telephone etc.). Thedirectors have also allowed for on-going Board activity until the Company is closed. The directors review the economicdependency reserve on a periodic basis.

(ii) Research synthesis reserve and other programs reserveThese reserves relate to project specific retained surpluses.

13 Remuneration of auditor

During the year the following fees were paid or payable for services provided by the auditor:

2012 2011$ $

PwC Australia

Audit and review of financial statements 32,650 30,350Other non-assurance services 14,600 20,850Total remuneration of PwC Australia 47,250 51,200

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14 Commitments

(a) Funding for Capital Expenditure

No capital expenditure was contracted for at the end of each reporting period.

(b) Lease commitments: Company as lessee

The Company leases its office under a non-cancellable operating lease expiring in 2014. The lease has varying terms,escalation clauses and renewal rights. On renewal, the terms of the lease are renegotiated. In addition, the Companyleases a photocopier.

2012 2011$ $

Commitments in relation to leases contracted for at the end of each reporting period butnot recognised as liabilities, payable:Within one year 97,835 103,656Later than one year but not later than five years - 107,618

97,835 211,274

The above commitments relate to a non-cancellable operating lease over the Company's premises and the lease of aprinter/photocopier.

15 Related party transactions

(a) Key management and personnel compensation

Key management and Board personnel compensation for the years ended 30 June 2012 and 2011 is set out below.

2012 2011$ $

Short-term benefits 258,514 258,780

(b) Other transactions with key management personnel or entities related to them

(i) A number of the directors of the Company are also stakeholders of universities and research facilities that havereceived contracted research funding from the Company. These funding contracts were based on the Company'sstandard terms and conditions. All potential conflicts of interest were declared and dealt with in accordance with AHURICorporate Governance Charter. Board directors representing the Australian Government, State and Territory governmentsand university participants do not receive any remuneration from Australian Housing and Urban Research Institute Limited.

16 Economic dependency

The Company depends for a majority of revenue on government funding. During the financial year ended 30 June 2012,approximately 51% (2011: 64.5%) of the Company's revenue was sourced from government funding. The timing ofpayments under the Funding Agreement for the National Housing Research Program effective 1 July 2009 has led to areduction in overall government source revenue since there were three payments received in 2012 compared to four in2011.

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17 Reconciliation of (deficit)/surplus after income tax to net cash inflow from operatingactivities

2012 2011$ $

(Deficit)/surplus for the year (1,211,840) 31,650Depreciation 12,785 21,951Change in operating assets and liabilities

(Increase) decrease in trade debtors and other assets (334,390) 54,810Increase (decrease) in trade creditors and other accruals 35,291 (125,180)Increase (decrease) in contracted research funding 438,099 (77,135)Increase in provisions 32,091 70,845Increase in deferred income 2,413,616 148,816

Net cash inflow from operating activities 1,385,652 125,757

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In the directors' opinion:

Australian Housing and Urban Research Institute Limited Directors' declaration

30 June 2012

(a) the financial statements and notes set out on pages 7 to 22 are in accordance with the Corporations Act 2001, including: (i) complying with Accounting Standards, the Corporations Regulations 2001 and other mandatory

professional reporting requirements, and (ii) giving a true and fair view of the Company's financial position as at 30 June 2012 and of its performance

for the financial year ended on that date, and (b) there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become

due and payable.

This declaration is made in accordance with a resolution of the directors.

~~' Chairman

Dr ian Winter Executive Director

Melbou~~r Date: t i' CXJo(;f?.L ZIJ/L

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pwc

Independent auditor's report to the members of Australian Housing and Urban Research Institute Limited

Report on the financial report We have audited the accompanying financial report of Australian Housing and Urban Research Institute Limited (the company), which comprises the statement of financial position as at 30 June 2012, and the statement of comprehensive income, statement of changes in equity and statement of cash flows for the year ended on that date, a summary of significant accounting policies, other explanatory notes and the directors' declaration.

Directors' responsibility for the financial report The directors of the company are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards - Reduced Disclosure Requirements and the Corporations Act 2001, and for such internal control as the directors determine is necessary to enable the preparation of the financial report that is free from material misstatement, whether due to fraud or error.

Auditor's responsibility Our responsibility is to express an opinion on the financial report based on our audit. We conducted our audit in accordance with Australian Auditing Standards. These Auditing Standards require that we comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance whether the financial report is free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report. The procedures selected depend on the auditor's judgement, including the assessment of the risks of material misstatement of the financial report, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial report in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial report.

Our procedures include reading the other information in the Annual Report to determine whether it contains any material inconsistencies with the financial report.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Independence In conducting our audit, we have complied with the independence requirements of the Corporations Act2001 .

r·························································· .. ·················································································· .. ························································································ PricewaterhouseCoopers, ABN 52 780 433 757 Freshwater Place, 2 Southbank Boulevard, SOUTHBANK VIC 3006, GPO Box 1331, MELBOURNE VIC 3001 T: 61 3 8603 1000, F: 61 3 8603 1999, www.pwc.com.au

Liability limited by a scheme approved under Professional Standards Legislation.

pwc

Independent auditor's report to the members of Australian Housing and Urban Research Institute Limited (continued)

Report on the financial report (continued)

Auditor's opinion In our opinion the financial report of Australian Housing and Urban Research Institute Limited is in accordance with the Corporations Act 2001, including:

(a) giving a true and fair view of the company's financial position as at 30 June 2012 and of its performance for the year ended on that date; and

(b) complying with Australian Accounting Standards - Reduced Disclosure Requirements and the Corporations Regulations 2001.

PricewaterhouseCoopers

Darren Jenns Partner

Melbourne 2...'{-0ctober 2012

Documents

Australian Housing and Urban Research Institute …...Australian Housing and Urban Research Institute Limited Directors' report 30 June 2012 Directors' report Your directors present